8th Pay Commission News: An interesting figure has been revealed on pension and salary spending in the budget of 2025-26 central government. According to budget profile documents, 2023-24 spent on pension has exceeded salary. This trend is also expected to continue in Budget 2025-26. Its impact can be seen on the 8th Pay Commission.
1. 2023-24 salary expenditure has been less than pension expenditure
The Union Budget of 2025-26 estimates that Rs 1.66 lakh crore will be spent on salary and Rs 2.77 lakh crore on pension. For the last three years, ‘salary’ and ‘pension’ allocations have been almost unchanged, but before 2023-24, the salary expenditure was much higher than the pension. It is noteworthy that between 2022-23 and 2023-24, there has been a huge decrease in ‘salary’ expenditure by Rs 1 lakh crore. This trend will remain almost the same even after 2023-24. This shows that there has been a huge decrease in salary expenditure, which can be estimated that the number of government employees will also decrease.
2. Total cost has not decreased
In budget documents, ‘salary’ and ‘pension’ are under the establishment expenditure. In addition to these two categories, the installation cost also includes a category called ‘others’. According to the available comparative data of 2017-18, despite the rapid fall in ‘salary’ expenditure after 2022–23, the total installation expenditure has continued to increase. This increase is mainly due to an increase in allocation in the ‘other’ category.
3. More allocation for allowances compared to salary
In the ‘Expenditure Profile’ section of the budget, the payment to the employees is given details. These are divided into three main categories: salary, allowances (except traveling) and travel expenses. From the year 2017-18, there has been no reduction in total allocation under this item. The number of employees employed by the government is also estimated to be between 2017-18 to 2025-26 to be between 32 to 37 lakhs.
However, the allocation for the ‘pay’ section has been stable, while the allocation for the ‘allowance’ section has increased significantly from 2023-24. Budget 2023-24 has reduced the allocation for ‘salary’ item because ‘salary’ no longer involves dearness allowance, house rent allowance etc. ) ‘It is included under the item. This change indicates that the total cost has not been reduced, rather it has been rearfined in various categories.
4. What will be the effect of the 8th Pay Commission?
The government has announced the formation of the Eighth Pay Commission, which is likely to be implemented from 2027. The Pay Commission includes dearness allowance in the original salary, which is given at the beginning of the period. Subsequently, dearness allowance increases every year according to inflation.
This also means that the more time the government takes in implementing the Pay Commission, the greater the ratio of dearness allowance and other allowances will increase compared to the basic salary. It will have a direct impact on the salary cost recorded in the budget.
When the recommendations of the 8th Pay Commission are applicable, there will be a sudden increase in ‘salary’ in the budget and ‘salary’ in the budget profile. The reason for this will be that a large amount of dearness allowances and other payments will be brought back to the ‘wage’ or ‘salary’ category.
